The British government and Bharti Global Ltd., which is part of the world’s third-largest mobile operator, have successfully bid more than $1 billion to acquire the bankrupt OneWeb satellite broadband internet venture.
London-based OneWeb said the deal, resulting from an auction held this week in New York, will enable it to resume plans to add to its 74-satellite constellation and offer global internet access from above, starting with the Arctic.
The sale still has to be approved by the U.S. Bankruptcy Court and regulatory authorities, but the transaction is expected to close late this year.
“With differentiated and flexible technology, unique spectrum assets and a compelling market opportunity ahead of us, we are eager to conclude the process and get back to launching our satellites as soon as possible,” OneWeb CEO Adrian Steckel said today in a news release.
The deal breathes new life into a rival of SpaceX’s Starlink constellation, which already has more than 500 satellites in orbit and could begin limited service this year. OneWeb is also perceived as a competitor of Amazon’s Project Kuiper, which is working out the regulatory requirements for putting more than 3,000 satellites in orbit for a global broadband internet network.
At one point, Amazon was rumored to be interested in bidding on OneWeb’s assets, including its spectrum licenses, but nothing came of those rumors. Telesat, which is Canada’s biggest satellite operator and has its own plans for a broadband satellite constellation, was also said to be considering a bid.
OneWeb ran out of money in March when the financial turmoil caused by the coronavirus pandemic ruined plans to seek additional investment from Japan’s SoftBank Group, one of the venture’s biggest backers.
Speculation over who would win out in the bidding battle touched on geopolitical rivalries as well as the realities of the telecommunications industry. Several Chinese concerns were reportedly considering bids, and the U.S. government was said to be ready to block a Chinese acquisition.
As the auction neared, the British government played a key role by putting up $500 million, matched by a commitment from the global arm of India’s Bharti Airtel. Other investors, perhaps including Arab financiers, may yet be revealed. Bloomberg News quoted an unnamed source as saying that Bharti and the government would each have a 45% share of OneWeb, with existing investors retaining 10%.
OneWeb said Bharti Airtel and its more than 425 million customers would serve as a “testing ground” and an “anchor customer” for OneWeb’s products, services and applications. Bharti Airtel operates India’s leading satellite broadcasting service through Airtel Digital TV, with more than 16 million subscribers.
In a statement, Britain’s Department for Business, Energy and Industrial Strategy said its role was in line with “the government’s ambition for the U.K. to be a pioneer in the research, development, manufacturing and exploitation of novel satellite technologies through the ownership of a fleet of low Earth orbit satellites.”
“This deal underlines the scale of Britain’s ambitions on the global stage,” Business Secretary Alok Sharma said.
The government said Bharti would provide “commercial and operational leadership” for OneWeb, while British officials would have a final say over future access to OneWeb’s technology by other countries on national security grounds, as well as over any future sale of the company. .
Data services have long been provided via high-flying geosynchronous satellites, but putting satellites in low Earth orbit promises to provide speedier, cheaper and more ubiquitous internet service for the billions of people around the world who are currently underserved.
British officials are reportedly interested in an option to add GPS-like capabilities to the constellation’s second-generation satellites, which would make up for the loss of access to Europe’s Galileo global positioning system due to Brexit.
OneWeb’s satellites are manufactured by a joint venture that also involves Airbus, Europe’s largest satellite company. Before bankruptcy, OneWeb Satellites’ factory in Florida was turning out spacecraft at a peak rate of two per day.
Judging by the U.K. government’s comments, it’s likely that at least some of that satellite production work will shift to Britain over time. “We’re excited to start this new working relationship,” OneWeb Satellites said in a tweet.
OneWeb’s existing satellites have been launched with the aid of Europe’s Arianespace consortium, using Russian-made rockets. But Blue Origin, Amazon CEO Jeff Bezos’ privately held space venture, has a contract to launch OneWeb satellites in the years ahead.
The first-generation constellation is expected to require 650 satellites for global coverage, and OneWeb has applied to put as many as 48,000 satellites in orbit.
It’s unlikely that OneWeb will have that many spacecraft in operation in the foreseeable future. Nevertheless, word of the venture’s resurrection renewed concerns that having tens of thousands of satellites in low Earth orbit — particularly in the orbits planned for OneWeb’s satellites — would ruin astronomical observations and could cause satellite traffic jams.
In a presentation prepared for a conference in the Netherlands, Tony Tyson, an astronomer at the University of California at Davis who is chief scientist for the Vera C. Rubin Observatory, said satellites in those orbits would be “incompatible with optical astronomy.”
Hat tip to Daniel Fischer for the report from the European Astronomical Society conference in Leiden.
More from GeekWire:
- British-led consortium favored to acquire OneWeb broadband satellite network
- OneWeb’s first satellites are launched into orbit for global internet constellation
- Investors commit another $1.25 billion to fund OneWeb’s internet satellite system
- OneWeb files for bankruptcy amid coronavirus chaos, leaving satellite network’s fate up in the air